Commercial Loans – DSCR JUMBO

JUMBO-DSCR

Investor Flex (DSCR)

  • 30-Year Fixed
  • Loan must be deemed a business purpose loan and be exempt from the ATR, QM, and HPML
  • Investment properties ONLY
    • Purchase, rate & term refinance, and cash-out refinances
    • Cash-out proceeds are limited to $1,000,000 and can be used as reserves
  • Max loan amount = $2,000,000
    • No minimum loan amount
    • Second appraisal required for loan amounts greater than $2,000,000
  • Minimum FICO = 640
  • Max LTV = 80%
    • 10% LTV reduction for unleased properties
  • Minimum DSCR = 1.00
  • Minimum 6 months of reserves required
    • Pricing may be affected when using less than 12 months of reserves
  • Up to 20 financed properties allowed
  • Maximum property size = 20 acres
  • Prepayment by state as permissible by law
    • Prepayment penalties: 3-year, 2 year and 1 year
  • Gift fund eligibility:
    • LTV less than 70% = 10%
    • LTV between 70.01% – 80% = 5%
    • LTV greater than 80% are ineligible to use gift funds
  • No appraisal waivers allowed
  • Transferred appraisals allowed
  • First-time homebuyers not permitted
  • Manufactured homes not permitted
  • Temporary rate buydowns not available
  • Mortgage payment history: one 30-day late allowed in last 12 months
  • Does not report to personal credit unless loan goes delinquent 
  • CLOSING IN AN LLC
  • Closing with an LLC/Partnership/Corporation vested on title is acceptable. 
  • The following documents are required when vesting in an LLC/Partnership/Corporation:
  • Articles of Incorporation or Articles of Organization
  • Operating Agreement, Corporate Resolution, or other equivalent documentation to verify ownership/authorization
  • Tax Identification Number – EIN (tax returns are NOT acceptable) 
  • Fully executed Certification Regarding Beneficial Owners of Legal Entity Customers
    • Primary borrower on the loan is required to be entered in Section D
  • Valid ID for any non-borrowing LLC owners
  • There is no minimum percentage of ownership required, but the primary borrower on the loan must have the authority to sign on behalf of the business entity. 
  • Refinances – at least one member of the business entity on the existing mortgage must also be a current member of the business entity on the new transaction
  • Layered entities are not permitted

Lease vs. Form 1007 Calculation Rules UWM:

  1. General Rule: For most scenarios, the lower of the lease agreement or 100% of the market rent from the appraisal Form 1007 will be utilized to determine the DSCR [1].
  2. Product-Specific Variations:

Blue Product:

  • Purchase (Long-Term Lease): Lesser of Market Rent or Long-Term Lease Amount
  • Purchase (Unleased): 75% of Market Rent
  • Refinance (Long-Term Lease): Lesser of Market Rent or Long-Term Lease Amount
  • Refinance (Unleased): 75% of Market Rent

Orange Product:

  • Purchase (Long-Term Lease): Lesser of Market Rent or Long-Term Lease Amount
  • Purchase (Unleased): 100% of Market Rent
  • Refinance (Long-Term Lease): Lesser of Market Rent or Long-Term Lease Amount
  • Refinance (Unleased): 100% of Market Rent .. UWM